The value of Glastonbury leasehold residential property falls as the lease term becomes shorter and this will have an impact on its saleability. The cost of a lease extension can increase significantly once the remaining term is below than eighty years
It is generally considered that a residential leasehold with over 100 years remaining is worth approximately the same as a freehold. Where an further 90 years added to any lease with more than 30 years remaining, the premises will be equivalent in value to a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Chelsea Building Society | 85 years from the date of completion of the mortgage. Please ensure that you explain the implications of a short term lease to the borrower. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 30 years plus the term of the mortgage at the outset of the mortgage. |
| Santander | You must report the unexpired lease term to us and await our instructions if: 1. the unexpired term assumed by our valuer is between 55 and 82 years, but the actual unexpired term differs by more than one year (whether longer or shorter); or 2. the unexpired term assumed by our valuer is more than 82 years but the actual unexpired term is less than 82 years; or 3. no valuation report is provided However, we will not accept a lease where on expiry of the mortgage: (i) less than 50 years remain and all or part of the loan is repaid on an interest-only basis: or (ii) less than 30 years remain and the loan is repaid on a capital and interest basis We will accept a lease that has been extended under the provisions of the Leasehold Reform Act 1993 provided statutory compensation would be available to the leaseholder. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
The conveyancers that we work with undertake Glastonbury lease extensions and help protect your position. A lease extension can be arranged to be completed to coincide with a change of ownership so the costs of the lease extension are paid for using part of the sale proceeds. You really do need expert legal advice in this difficult and technical area of law. The lawyer we work with provide it.
Zachary owned a studio flat in Glastonbury being marketed with a lease of fraction over 59 years outstanding. Zachary informally contacted his landlord a well known London-based freehold company and enquired on a premium to extend the lease. The landlord was prepared to agree an extension on non-statutory terms taking the lease to 125 years on the basis of a new rent at the outset set at £200 per annum and increase every 25 years thereafter. No ground rent would be due on a lease extension were Zachary to exercise his statutory right. Zachary procured expert legal guidance and was able to make a more informed decision and deal with the matter and ending up with a market value flat.
Mrs R Carter purchased a basement apartment in Glastonbury in June 2006. We are asked if we could approximate the price could be to prolong the lease by an additional years. Identical properties in Glastonbury with a long lease were worth £184,000. The mid-range ground rent payable was £55 collected per annum. The lease end date was on 25 April 2079. Given that there were 53 years as a residual term we estimated the premium to the freeholder to extend the lease to be between £28,500 and £33,000 not including fees.
In 2010 we were approached by Mrs A Morel who, having acquired a studio apartment in Glastonbury in August 1995. The dilemma was if we could estimate the compensation to the landlord would be for a ninety year lease extension. Comparable flats in Glastonbury with an extended lease were in the region of £290,000. The mid-range ground rent payable was £45 billed monthly. The lease finished in 2099. Considering the 73 years as a residual term we approximated the premium to the landlord for the lease extension to be between £9,500 and £11,000 plus professional charges.